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Audit Finds $35M In Cable Fees Sitting Untouched In LA City Fund

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Officials say fees collected by Time Warner and other cable companies are adding up at City Hall. (Photo credit: Kevork Djansezian/Getty Images News

LOS ANGELES (CBSLA.com) — A new audit by the Los Angeles City Controller’s office has found millions of dollars paid by taxpayers that goes into a city telecommunications fund are going unused because of outdated laws.

KNX 1070’s Megan Goldsby reports the audit from Controller Ron Galperin shows how $35 million in fees paid by Los Angeles cable customers has accumulated as of May 31.

Audit Finds $35M In Cable Fees Sitting Untouched In LA City Fund

knx logo black Audit Finds $35M In Cable Fees Sitting Untouched In LA City Fund
KNX 1070 NEWSRADIO

Money in the city’s telecommunications fund comes from public, educational and government fees and franchise fees, which customers pay to cable companies, who in turn pay the city in exchange for the use of tunnels under the streets, according to Galperin.

“They add somewhere between, on an annual basis, say $30 to $50 to people’s cable bills,” Galperin said.

Under state and federal law, the funds can only be used for capital equipment for government access cable television channels, according to Galperin.

About $20 million is currently earmarked for a new downtown television studio for Channel 35 – the city’s own public access channel – but the city’s Information Technology Agency (ITA) has no plans in place for how or where to spend the remain funds, which is projected to balloon to $25 million by 2017.

In his report, Galperin recommended the ITA implement a plan to spend the money and “explore more creative and effective uses” of the fees.

“We are in a totally different era in terms of how people get their information, so much of viewership is on the Internet right now, not necessarily on cable,” Galperin said.

Some potential uses for the money could be for establishing a public WiFi network and city Internet sites for programming and other information, he added.

Click here (PDF)
to read the full “Audit of the Telecommunications Fund”.

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